Sustainable: Saving the green stuff by going green

Murphy Warehouse CEO Richard Murphy with a solar installation on the roof of his Minneapolis facility. (File photo: Bill Klotz)

Murphy Warehouse CEO makes the business case for sustainability

Richard T. Murphy Jr.’s office in an industrial part of Minneapolis looks more like a record producer’s space than a warehouse CEO’s.

The walls of the office, and the walls leading into it, are lined with large, framed displays of albums and memorabilia from the Beatles, the Rolling Stones and other bands — all illuminated by energy-efficient lighting powered in part by rooftop solar panels.

The company is a nationally recognized leader in sustainability in the warehouse industry. But beyond his laser focus on sustainability, and his early career as a landscape architect, Murphy seeks a return on investment.

“If you go to hear a talk about being green and the impact it has on the bottom line, you often hear you should do it because it’s a good thing to do — it’s good for your heart,” he said. “But when I speak about it, I look at our total experience and our numbers and the guts of what we’re doing.”

The company’s 12 warehouse sites in the Twin Cities area mix different approaches to sustainability, ranging from native gardens to solar panels to LED lighting to white roofs that reflect the sun. He recently prepared an 80-slide presentation full of statistics on how the company — which operates 2.7 million square feet and manages 120,000 trucks annually — incorporates sustainability into many facets of its business.

The result of those efforts, he said, has been cost savings, a healthier workplace, several awards, and recognition by the United States Green Building Council, which gave three of his warehouses LEED certification (Leadership in Energy and Environmental Design).

“He’s very serious and probably one of the pioneers in this city of really looking at sustainability as a business strategy,” said Tom Oslund, owner of the Oslund & Associates landscape architecture firm.

Oslund sees Murphy’s environmental stewardship as “commendable” despite the fact that it’s “not always cost-effective” in the short term. “But in the long term there is always a payback,” Oslund said.

Given his training, it makes sense that one of Murphy’s first forays into cost savings came from studying his company’s landscaping. By replacing the company’s lawns with native prairie plants he found significant cost savings. At the Fridley operation, the company placed native prairie plants 16 years ago and saved a total of $947,000.

How? Lawns require fertilizer, watering, mowing and a lot of maintenance. Prairies do not need fertilizer, watering or a lot of maintenance. Lawns per acre cost $5,167 annually and natives just $707, he said. Still, he maintains a lawn border on all native gardens for visual appeal.

The Fridley site’s native gardens have been so popular with the public that plants have been stolen twice, Murphy said. One of the thefts occurred in 2009 when an elderly couple casually parked their car, got out and dug a few plants out of the ground.

“They were part of what Tom Brokaw calls ‘The Greatest Generation,’” he said, laughing.

Wildflowers thrive in a retaining pond on the Murphy Warehouse facility in southeast Minneapolis.

Another aspect of landscaping is dealing with storm water. Murphy installed retention ponds at the Minneapolis headquarters, which eliminated the $68,000 storm water fee. The ROI is seven years when federal credits are taken into account.

Maple Plain-based Wenck Associates Inc. built the ponds. Wenck engineer Rebecca Kluckhohn said Murphy not only understood the ROI of credits and financing of the project but also the good will that comes with being an environmental trailblazer.

“He’s not just out to make a buck. He’s a good citizen for doing this, and I feel honored to have worked with him,” she said.

Murphy also likes solar power — when it makes economic sense. His company has panels on five buildings producing 320 kilowatts, enough to make it the state’s fourth-largest solar producer. On one project he managed to buy $1 million worth of panels from Bloomington-based TenKSolar for just $90,000 by using a mix of grants and credits from Minneapolis-based Xcel Energy and the government.

The yin and the yang of being green may be best seen in Murphy’s recent retrofit of an Eagan warehouse. He looked into storm water retention ponds but found the city offered no financial incentives. “I’m not willing to make that jump yet,” he said.

On the other hand, he installed LEDs in that same warehouse even though the payback was two years longer than a competing energy-efficient lighting system. But LED lighting lasts significantly longer, requires less maintenance and uses 31 percent less wattage, all compelling enough advantages to green-light the project.

“We weren’t going to make the decision for LEDs if we weren’t going to get any benefit other than being green,” Murphy said.

The Eagan facility also has a 40-kilowatt solar array with an 11-year payback, a time period that definitely tested his comfort level. Still, he found a low-interest U.S. Small Business Administration loan to cover 95 percent of the cost. “This way I get to keep my money for a rainy day,” he said.

The St. Paul native’s environmental ethos comes in part from his early career as a landscape architect. After receiving degrees from the University of Minnesota and Harvard University, he taught college and worked in the field for several years before returning to help the family business in 1983.

Arriving just in time to see the company suffer a downward slide after trucking deregulation, Murphy worked his way up to CEO and led the company’s expansion into Fridley and other cities in the 1990s and 2000s. During his career he has maintained his landscape architecture license, offered many presentations on sustainability and found time to teach at the University of Minnesota for 25 years.

His simple message: Give sustainability a bit little longer to pay off and it will. “You can’t be too altruistic and be in business,” said Murphy. “There has to a reasonable return on investment or you’re not going to be in business anymore. But there’s a lot of low-hanging fruit out there if you’re patient.”